Steel mill will be a sweet addition to the sugar fields: An editorial

BRETT DUKE / THE TIMES-PICAYUNENucor Chief Operating Officer, John Ferriola, makes his way to shake hands with Governor Bobby Jindal during a press conference at the St. James Parish Welcome Center in Gramercy Wednesday, September 15, 2010 where Governor Bobby Jindal announced that Nucor Corp. has chosen a Louisiana site for a $3.4 billion iron plant. The site will in Convent near the Sunshine Bridge in St. James Parish.

Bringing 1,250 new jobs to Louisiana would be an economic boon at any time, but steelmaker Nucor's plan to build a $3.4 billion iron and steel production complex on former sugar plantation land in Convent is even sweeter during an economic slowdown when major new manufacturing investments are scarce.

The Jindal administration has been wooing Nucor, the nation's largest steelmaker, for some time, and this is a big win. The jobs created by this significant investment will pay an average of $75,000 per year, including benefits.

The state's commitment includes a river port terminal, infrastructure assistance and tax breaks. The company, in turn, will have to meet employment targets or face penalties.

The Charlotte, N.C.-based company had been planning to build a pig iron plant to control the supply and price of the commodity that it now imports. But because of uncertainties about greenhouse gas emission standards, Nucor shelved that plan in favor of a direct-iron reduction plant, which will produce less carbon dioxide.

The complex will be built in phases, with each phase adding to the number of jobs.

Construction on the first phase, a $750 million direct-reduced iron plant, will begin as soon as Nucor gets an air quality permit from the state. That phase, which will take two years, will create 150 jobs.

The fifth phase, a $750 million steel mill that will employ 500 people, is significant because product makers who use steel might choose to locate nearby to save on transportation costs.

The promise of so many new, well-paying jobs is a positive development for Louisiana, which has taken some hard economic blows recently. The BP oil spill has hurt fishing and recreation-related tourism, and the deepwater drilling moratorium hard hit rig workers and the many industries that support offshore drilling.

The Michoud Assembly Facility, which employed 5,000 people during the peak of the space shuttle program, has seen those jobs dwindle, and by 2013, Northrop Grumman will have closed its Avondale shipyards.

Louisiana is working on a facility assessment and marketing plan for Avondale, and the state recently announced a new tenant at Michoud. Those are good steps, and the state should continue to market these assets.

In the meantime, the Nucor deal is a refreshing piece of good economic news.